Rising costs in the health insurance industry moved to the forefront before one committee in the Idaho Legislature Wednesday with discussion on a proposal to open up the Idaho market to insurance providers from out of state.

Rep. Julie Ellsworth, R-Boise, introduced House Bill 587 to the House Business Committee on Wednesday that would allow insurance companies from other states to offer their products in the Gem State without having to be licensed in Idaho. Companies would be given a certificate of authority, which would allow them to sell in Idaho.

The bill was sent to general orders to clean up a few concerns. Based on testimony from the hearing, the amendments likely will deal with fees for selling insurance in the state of Idaho, as well as who would be responsible for dealing with grievances.

George Gersema, chief executive officer of Employers Resource, said having more options for insurance will bring costs down, and allow Idahoans to find policies that fit their needs better. Gersema compared the health insurance industry to the car insurance industry, asking why he has so many options for car insurance, but is very limited with his health insurance choices. “You know my choices for car insurance include Allstate, State Farm, Farmers, Progressive, Geico, Liberty, Nationwide, Travelers, and on and on and on. I don’t have those choices for health insurance. I have more choices for my car than I have for me.”

Gersema told the committee that during the last year he has been trying to find a policy for his company, but he ended up with something he didn’t completely want. “I had two things that I was looking for. I wanted a $20,000 deductible, I wanted a specific drug formulary.” Gersema said his needs did seem to him to be outrageous, but he could not find anything close to what he wanted in the Idaho market.

Said Gersema, “I went to the marketplace, what did I find? Well, I didn’t find a $20,000 deductible. Nor a 30, nor a 50. I said. ‘Well, I am going to the wrong way here, I will go down.’ I didn’t find a $15,000 deductible. Ah, now I’m lucky. I found a $10,000 deductible offered by Aetna. They can cover my employees that I have in Texas, California, Georgia, around the country. Oh, but wait. They can’t cover my employees in Idaho.”

Besides not finding what he wanted, Gersema said he is paying a premium for the policy he had to settle for by more than two-and-half times.

Wayne Hoffman, representing the Idaho Freedom Foundation, echoed Gersema’s comments. “We’re talking about adults who have the ability to make all kinds of purchasing decisions across state lines except for this one and there is no real reason why that is. Opening up the free market allows for competition, allows for lower prices, and that tends to bring down the cost,” said Hoffman.

Hoffman concluded, “I, as a grown-up who can make choices in the marketplace, can go on the Internet and buy a used car from Bobby Shnobby in New Jersey. Now, I don’t know if I should do that or not, maybe I shouldn’t. But for some reason we’ve decided that in terms of insurance we’re going to tell people, ‘no, they can’t.’”

Not everyone seemed pleased with the proposed legislation though. Rep. John Rusche, D-Lewiston, believes there are several flaws in the legislation, including what would happen if a grievance was filed against a company selling insurance in Idaho from out of state. He wondered who would handle grievance—Idaho or the other state?

Bill Deal, director of the Idaho Department of Insurance, seemed unsure about the regulatory end of the spectrum with regard to his department, but said he would help the state if it wished to go down this road, though he was worried about funding for the department.

Deal said about one-third of its funding comes from licensing fees from insurance companies. Because the bill doesn’t require companies from out of state to be licensed, unless something is changed in the bill, those companies would not have to pay a fee to sell their products.

Deal also said there are 731 companies that can sell insurance in Idaho. He said that a person can go to the department’s website and look at the companies, though only around 20-30 of the best companies in Idaho are listed.

Rep. Brent Crane, R-Nampa, said he believes competition will lower costs and improve options. “It’s my philosophy and feeling that we need to do something to increase the competition and options for the citizens of Idaho.”

Crane also went online during the hearing and questioned the accuracy of Deal’s statement. “I did go to the Department of Insurance’s website, and I did look under small employer health benefits as well as individual health benefit companies. There’s 11 companies listed under the small business and six listed under the individual policies. The interesting thing is that they’re overlapping. The companies that offer the small employer health benefits also offer the individual health employer benefits. So, really, there’s about 11 companies that citizens of Idaho have to select from.”

Crane then also noted his company’s health rates continuing to rise, and said it’s time to do something about it. “I don’t know about other individuals, but I can speak personally having just gone through this in August. My health insurance rates are continuing to escalate. And yet, we sit here year after year …”

Seems to provide a way for the feds to prove that health insurance is an interstate product and can be mandated by the federal government. Not only that but there are hundreds of health insurers already licensed in the state of Idaho unfortuately they just dont offer those products listed. Lets not forget this does not include major medical health plans the ones mentioned in this bill are for accident and sickness only…dont cover much of anything unless you have a major accident and pay out the $10,000 deductible first. Not sure what the point is with this bill.

I am sure we would have more large “for profit” insurance carriers offering healthcare insurance in the state of Idaho if they thought for a second they could make money here. What most people don’t realize is, a health insurance product includes pre-negotiated unit pricing with doctors, hospitals and other healthcare providers. Creating such a provider network is expensive and time consuming. It is the reason large “for profit” insurance carriers are not interested in Idaho. It doesn’t matter what bill we pass, they are not going to come. We should feel privaliged that we have two “non profit” Blue plans competing in this state. Most states don’t have our situation.

The TWO BIG BLUES have for too long held a virtual monopoly on health insurance in Idaho. Blue Cross and Regence Blue Shield need to have some competetion for health insurance dollars. Companies can shop for health insurance across state lines ….why not individuals. Until recently I had a $7500 deductible policy with one of the Blues for a mere $375.00/month. It covered my wife for catastrophic illnesses only. We never filed a claim but the price kept going up and up and up. I have no idea what the ability to cross state lines will do but I suspect the prices will come down.

Now all we have to do is figure out why St. Luke’s and St. Al’s are the highest reimbursement hospitals in the North West according to insurance reps.

The monopoly is not at the insurer level. It is at the provider level. And for those of you in Boise who have seen the consolidation, and other places where there is only one source of ER or ICU or cardiac catheterization, have seen it too. Fragmenting the negotiating power of the health plans will not do any good.

The way that I believe we can make inroads into the excess cost and less than world class clinical outcomes is to engage the patients, the payers and the providers in being rewarded not for volume of services but for efficiency and good results.

H587 does not do that. In fact, it likely will hurt both the ability to counteract the provider monopolies and the ability to develop systems that measure and improve quality and efficiency

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